PARIS Credit Agricole shares slumped to an all-time low on Monday as Greek elections revived concern about a possible exit from the euro zone and the effect such a move would have on the French bank's Emporiki unit.
Credit Agricole shares were 6 percent lower at 3.43 euros, bringing their decline so far this year to 21 percent. The shares are now at their lowest level since the bank's initial public offering in December 2001.
"Credit Agricole, via its Emporiki unit, is inevitably the bank which is being hardest hit after the debt haircut because of worries about the Greek economy beyond its sovereign debt," said Yohan Salleron, a fund manager at Mandarine Gestion in Paris.
He added that the Greek elections are also reviving wider concerns about the euro zone as a whole, with a negative impact on other banks including BNP Paribas - down 3.2 percent - and Societe Generale - down 2.9 percent. Both were underperforming the euro zone sector, down 1.4 percent.
"With the tensions in Greece, we're falling back into worries about a contagion effect on the other countries in difficulty," he added. "The euro zone has to mobilize to show that it's a case apart."
Anti-bailout parties made a strong showing in Greece's Sunday elections, casting doubt on the ability of its conservative leader to forge a coalition protecting the country's place in the euro zone.
Credit Agricole injected roughly 2 billion euros into Emporiki in early January. Chief Executive Jean-Paul Chifflet said in February the bank was looking to cut its funding exposure to the bank by a variety of means including access to central bank funding.
Credit Agricole said in March that Emporiki would take new hits on loans to state-controlled entities to whom private creditors extended the same debt forgiveness as on Greek sovereign bonds, as part of a 130 billion euro ($170.48 billion)bailout.
France's largest cooperative bank is slated to report a sharp drop in first-quarter earnings on Friday even after a 550 million euro gain as a result of two offers to buy back subordinated debt launched in January.
Investors said that while the victory of Socialist Francois Hollande in presidential elections on Sunday did not qualify as good news for the French banking industry, it was having only a marginal effect on shares in the country's banks.
"The CAC is down about 1.5 percent, while other indexes are down 2 percent," said Yannick Naud, London-based portfolio manager at Glendevon King Asset Management. "The French OAT government 10-year yield is also holding up. While we know that Hollande's policy proposals are somewhat negative for banks, for oil companies and for utilities, we've known for months that he was the likely victor."
($1 = 0.7625 euros)
(Additional reporting by Lionel Laurent and Matthieu Protard)